Insolvency of Mobile Money Firms in Developing Countries: Overview for Policy Makers

E-money services have become increasingly popular, particularly in developing countries. These services, offered by providers other than traditional banks, enable customers to deposit, store, transfer value, and, in some cases, convert e-money back into cash. A key e-money service is mobile money. This note provides an overview of the challenges policy makers may encounter when a mobile money firm becomes insolvent. Such firms would likely be subject to corporate insolvency laws. Existing mitigation tools meant to safeguard customers’ funds may face legal and logistical problems unless they are coordinated with the country’s standard insolvency system. Customers may lose funds and/or not have quick access to them. The note also highlights several areas requiring further research.